Economic expansion not over yet, RBC manager says

Healthy economic activity bodes well for resource companies; no imminent recession, says Brahm Spilfogel.

Jade Hemeon 28 June, 2018 | 5:00PM
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Brahm Spilfogel, co-manager of RBC Global Resources as well as vice president and senior portfolio manager of Canadian and global equities at Toronto-based RBC Global Asset Management, sees more road ahead for the current economic cycle to advance, despite the fact that the nine-year expansion has been one of the longest in history.

Healthy economic activity bodes well for the fortunes of resource companies producing commodities like oil, copper and lumber as inventories are consumed around the world, he says. Growing employment, tightening wage pressures and burgeoning government deficits could also be laying the ground for higher inflation and possible revival of gold, a commodity that has languished for several years.

"The length of the economic expansion would suggest we're in the latter part of the cycle, but we don't yet see the end and are not facing imminent recession," says Spilfogel, who co-manages RBC Global Resources with fellow senior portfolio manager and vice president Chris Beer. "We expect resource markets to chug along, but beyond the next year to year and a half it's hard to say. We are always on the lookout for reasons to get more defensive."

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BHP Group Ltd ADR54.95 USD0.75Rating
Chevron Corp97.56 USD2.85Rating
ConocoPhillips62.28 USD4.97Rating
Diamondback Energy Inc84.33 USD5.36Rating
EOG Resources Inc74.61 USD3.32Rating
First Quantum Minerals Ltd22.58 CAD7.45
Kirkland Lake Gold Ltd54.08 CAD0.33
Parex Resources Inc21.37 CAD7.49
Rio Tinto PLC ADR66.69 USD2.02Rating
Royal Dutch Shell PLC ADR Class A41.30 USD0.79Rating
TotalEnergies SE ADR45.67 USD2.36Rating
West Fraser Timber Co.Ltd102.84 CAD2.60

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Jade Hemeon

Jade Hemeon  

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